Pfizer's Xeljanz story reveals why new drugs are so costly

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Sixteen years ago, microbiologist Craig Kent and two other colleagues at Pfizer Inc.'s Groton laboratories were running routine tests on drugs expected to suppress immune response when they noticed a surprising result.

One of the synthetic compounds, which after some tinkering came to be known as tofacitinib and is about to be introduced to the world as the rheumatoid arthritis breakthrough Xeljanz, showed a surprisingly potent effect, inhibiting immune response by more than 50 percent in testing on both enzymes and cells.

"Sometimes you get 50 percent inhibition in an enzyme assay, but not as often in a cell assay," Kent said. "It's rare you get both."

Suppression of the immune response is critical in treating diseases such as rheumatoid arthritis, which affects an estimated 1.5 million Americans. That's because an overactive immune system can treat cartilage as a foreign substance, wearing away the substance that holds joints together while causing pain and even disfigurement.

Mark E. Flanagan, a senior principal scientist at Pfizer and a medicinal chemist who saw Xeljanz through its early stages, says the initial testing on the drug was one of three "eureka moments" that scientists in Groton experienced along the way to U.S. Food and Drug Administration approval last week for the largely homegrown drug.

The other key moments, he said, were when scientists developed and tested the specific compound that they later called tofacitinib and when they moved to animal testing and found that the so-called JAK3 inhibitor maintained its earlier effectiveness while leading to fewer side effects than other drugs that suppress the immune response.

John O'Shea, a scientist at the National Institutes of Health, is generally credited with discovering nearly 20 years ago the enzyme that leads to some immunodeficiency diseases. The enzyme was found by studying children, such as the famed "bubble boy" David Vetter, who had a defect in their JAK3 genes.

When former Pfizer researcher Paul Changelian heard about the enzyme during a casual conversation with O'Shea at a national conference, he became interested and began with scientific partners the then-arduous process of cloning the JAK3 enzyme so tests could be performed to find a drug to counteract its effect.

"All the screening work and compound synthesis was done in Groton," Changelian said in an email last year.

16-year process

Work on what became known internally as the JAK project in Groton began in 1996, three years after discovery of the enzyme that causes immunological mayhem. But it would take four more years and a screening process that combed through 400,000 possible compounds and synthesized about 1,000 of them to come up with tofacitinib, the world's first pill to treat rheumatoid arthritis.

"It was a bit of a long haul," said Flanagan, the medicinal chemist assigned to the JAK3 project.

Flanagan said the process became bogged down partly because of the novelty of the drug. No other big pharmaceutical company had attempted to inhibit the JAK3 enzyme, he said, so there was no blueprint to follow for how to speed the drug through the development process, and roadblocks sometimes came up that took a while to overcome.

An even more arduous process ensued after Flanagan and other project scientists in 2000 handed off the JAK3 compound to the company's clinical teams in Groton and New London, who took another dozen years to jump through all the regulatory hurdles to bring the new medicine to market.

New space-age equipment at the Groton labs makes the process of analyzing potential drugs much less time-consuming today than it was 16 years ago, said Rose Gonzales, director of compound management and distribution at Pfizer's local campus. But even with increased speeds in testing possible compounds (the ability to run 384 assays at a time and pushing toward 1,536 in the near future), the company can shave only a month or two off the drug-approval process, she said, hardly a big dent in the 16 years it took to get the FDA go-ahead for Xeljanz.

Flanagan agreed that Xeljanz could be a case study for why drug costs are so high (the JAK inhibitor will come at a price tag of about $25,000 a year, which is actually slightly less than the injectable treatments Humira and Enbrel, but far above the cost of generic methotrexate, which costs less than $1,000 a year).

But he sees the drug's approval as vindication for Groton scientists who have been under the microscope over the past decade as Pfizer investors grumbled about lack of productivity - and the paucity of big blockbusters - coming out of the local laboratories.

"It's a very tough business we're in," Flanagan said. "It's hard to find new drugs."

Groton still key

Analysts have predicted that Xeljanz eventually could account for $2 billion or more in revenue for Pfizer, not enough to make up for the loss a year ago of the $10 billion blockbuster cholesterol medication Lipitor, but one in a series of late-stage success stories for the New York-based company.

Pfizer, in a downsizing mode over the past few years, has about 1,100 fewer scientists today than it had last year as it moved discovery work in several therapeutic areas to Boston. But the Groton campus has retained a key role in the Pfizer universe by concentrating on supporting company scientists worldwide by developing drugs from their early stages to overseeing clinical trials.

While Flanagan's work with Xeljanz is done, Pfizer is still putting the drug through its paces in clinical trials, trying to determine whether it can help with other immunological diseases, such as psoriasis, a common skin problem, and ulcerative colitis, otherwise known as inflammatory bowel disease.

"What brings us to work every day is the hope we will find something that can help patients," Flanagan said.


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